BMPs are essential for chondrogenesis and tissue engineering strategies for the treatment of osteoarthritis. In the prior grant period, through an extensive characterization of single, double, and triple mutant mice lacking BMP receptors or the downstream transducers R-Smads, we found that BMPs are required for nearly every aspect of growth plate chondrogenesis in vivo, and that most of the effects of BMPs are transduced through R-Smads. Unexpectedly, Smad4, the co-Smad that is thought to be required for complex formation in the canonical BMP signaling pathway, has a much more limited role in chondrogenesis. This finding challenges the widely accepted tenet that Smads1/5 transduce the majority of their effects through canonical pathways. Our central hypothesis is that BMPs transduce the majority of their effects through R-Smad-dependent but Smad4-independent mechanisms, whose importance has been previously unrecognized. We will test this hypothesis and define the underlying mechanisms in four Specific Aims. In Aim 1, we investigate how Smad1/5-dependent, Smad4-independent mechanisms transcriptionally regulate the expression of Ihh, a key direct target of BMP pathways in chondrocytes. We will also perform the first analysis of BMP effects on global gene expression in growth plate cartilage. We add spatial and temporal resolution by employing laser capture microdissection and ex vivo organ culture. In Aim 2, we will test whether Smads1/5 are required for activation of TAK1 as a novel mechanism underlying Smad1/5-dependent, Smad4-independent signaling, defining a previously unknown interaction between R-Smads and non-canonical pathways. In Aim 3, we determine how Smad1-Drosha mediated miRNA maturation contributes to Smad1/5-dependent, Smad4-independent signaling through identification of miRNAs whose transcription and maturation are induced by BMPs in chondrocytes. In Aim 4, we test the hypothesis that Smad1/5-dependent, Smad4 independent signaling through the mechanisms explored in Aims 1-3 is as important in adult articular cartilage as it is in the growth plate. These experiments hod the potential to answer longstanding questions about BMP function in adult cartilage, and to uncover novel mechanisms through which BMPs transduce their signals in cartilage. We anticipate that this information will have clinical relevance given the high prevalence of OA, the potential for BMP pathways to impact chondrogenesis and cartilage maintenance, and the need to identify the pathways downstream of BMPs that are most likely to promote the chondroprotective effects of BMPs.